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The Influence of Firms on Government

Author

Listed:
  • Macher Jeffrey T

    () (Georgetown University)

  • Mayo John W

    () (Georgetown University)

  • Schiffer Mirjam

    () (Secretariat of the Swiss Competition Commission)

Abstract

While interest group explanations have considerably advanced our understanding of governmental outcomes, much remains to be understood about the specific country-level, industry-level and firm-level characteristics that underlie the influence firms have on the establishment of governmental rules, laws and regulations. In this study, we draw upon a unique database of roughly 6000 international firms to investigate the abilities of firms to affect governmental policies. We find that country-level institutional characteristics, such as the legal origin and political diversity of the firm’s home country, significantly affect the ability to influence government. We also find that industry-level characteristics, such as the number of industry competitors, and firm-level characteristics, such as size and age, are determinants of firm influence on governments.

Suggested Citation

  • Macher Jeffrey T & Mayo John W & Schiffer Mirjam, 2011. "The Influence of Firms on Government," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-27, January.
  • Handle: RePEc:bpj:bejeap:v:11:y:2011:i:1:n:1
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    References listed on IDEAS

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    1. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
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    4. repec:cup:apsrev:v:88:y:1994:i:04:p:911-926_09 is not listed on IDEAS
    5. Josh Lerner & Antoinette Schoar, 2005. "Does Legal Enforcement Affect Financial Transactions? The Contractual Channel in Private Equity," The Quarterly Journal of Economics, Oxford University Press, vol. 120(1), pages 223-246.
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    7. Johan F. M. Swinnen, 1994. "A Positive Theory of Agricultural Protection," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(1), pages 1-14.
    8. Gene Grossman & Elhanan Helpman, 1994. "Foreign Investment with Endogenous Protection," NBER Working Papers 4876, National Bureau of Economic Research, Inc.
    9. Potters, Jan & Sloof, Randolph, 1996. "Interest groups: A survey of empirical models that try to assess their influence," European Journal of Political Economy, Elsevier, vol. 12(3), pages 403-442, November.
    10. Russell Pittman, 1976. "The effects of industry concentration and regulation on contributions in three 1972 U. S. senate campaigns," Public Choice, Springer, vol. 27(1), pages 71-80, September.
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    Citations

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    Cited by:

    1. Mario Bazán & Francisco Sagasti & Raúl Cárdenas, 2014. "National system of innovation for inclusive development: achievements and challenges in Peru," Chapters,in: National Innovation Systems, Social Inclusion and Development, chapter 6, pages 169-198 Edward Elgar Publishing.
    2. Angela Garcia Calvo, 2014. "The Role of State-Firm Relationships in Fostering Competitiveness: Telefonica’s Upgrading," Carlo Alberto Notebooks 397, Collegio Carlo Alberto.
    3. James Lake & Maia Linask, 2016. "Domestic political competition and pro-cyclical import protection," Review of International Economics, Wiley Blackwell, vol. 24(3), pages 564-591, August.
    4. Jeffrey Macher & John Mayo, 2012. "The World of Regulatory Influence," Journal of Regulatory Economics, Springer, vol. 41(1), pages 59-79, February.
    5. Wöcke, Albert & Moodley, Terence, 2015. "Corporate political strategy and liability of foreignness: Similarities and differences between local and foreign firms in the South African Health Sector," International Business Review, Elsevier, vol. 24(4), pages 700-709.

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